I love my Tivo and would not watch TV without it. Explaining it to people unfamiliar with Tivo is hard enough, but will be next to impossible with today’s price increases.
My Tivo is honestly one of the best things I’ve ever bought. I’ve often said that if it ever broke, I’d be at the store at 8:00am the next day to buy a new one. It has liberated me from having to watch shows at certain times and always has something I actually want to watch. I will never watch “live” TV again if at all possible.
Naturally, having such a profoundly positive experience with the Tivo made me want to share its wonders with friends and family. Like a good Tivo fanatic, I extolled the many virtues of the simple-looking little box to anyone who’d listen. I’d explain how it is so much more than simply pausing live TV, despite what the commercials explain.
Of course, the next logical question the person would ask is, “How much is it?”
Well, when I bought my Tivo, you had the option of paying $9.95 per month for service or a single $200 lifetime (of the box) lump sum. After a while, Tivo decided that the service was worth $12.95 per month, or $250 for the lifetime, and eventually $300. These are fees on top of your monthly cable bill and the purchase of the box itself.
So, upon hearing that it was going to cost $12.95 per month for service, most people immediately rejected the potential joys of never watching commercials or missing shows again. I understand. I avoided buying a Tivo for the same reason myself, even at the $10 per month rate. So, out of the dozens of people I explained Tivo to, only a couple have actually bought one (and they incidentally love it just as much). That’s a pretty poor conversion rate and it’s soley due to the monthly fees.
Today, however, I believe that Tivo just drove the nail into their own coffin. They upped the monthly fee to $19.95 per month.
Wow… I would not pay that much and I’m already sold on the concept. What are they thinking?
Now, for your $20 per month in a one year commitment, you get the Tivo box itself for free. It’s a standard run-of-the-mill Series 2 – nothing special these days. That amounts to anywhere from a $40 to $100 value. So, for the first year, you just about break-even with the $20/month+free box vs. buying the box and paying the old $13/month rate.
But after that, you pay $240 per year for as long as you own the box!
Wouldn’t a person simply pay the lifetime fee of $300 after the first year to at least limit hemhorraging of cash? Oh, I forgot to mention that Tivo eliminated the lifetime subscription in this train-wreck of a new pricing scheme.
So, while it was nearly impossible to convince people that Tivo is worth $13/month, I won’t even bother trying now that it’s $20/month. As an aside, buying the $100 box was never an issue (and you’d have to be really lazy to not find one for quite a bit less than $100) – it was always the monthly recurring fee, which to be honest, is all I’d worry about as well if I didn’t have one.
Of course, in an attempt to make the fees seem more reasonable and also maybe grab your cash up front, Tivo has “discounted” monthly pricing if you pre-pay or commit to multiple-year contracts. So, if you’re willing to sign-up for a 3 year contract, you will pay $610 over the period, a whopping $17/month. Pre-paying a lump-sum is a slightly more reasonable $13/month, but that’ll cost you $469 all at once. Now, keep in mind that today’s society seems to prefer the “installment plan” rather than paying large lump sums, even if it costs less. Just look at credit card use these days!
So, considering the resistance to paying $13/month on the old pricing plan, how many people would you expect to jump on-board for $20/month? My guess is nobody I know. Of course, the people I know tend to be a bit more financially responsible and will shy-away from monthly wallet milkings, so maybe the general public, who run an average credit card debt of $8,000 from month-to-month, will have less of a problem with this increase. I don’t know. I do know that I will not be wasting my time trying to explain the values of Tivo to my friends because it’ll be a total waste of time.
Now, if my Tivo ever breaks, I’ll be looking at lesser alternatives (cable company DVRs generally suck but are much cheaper and will hopefully get better) or maybe I’ll even build my own DVR using MythTV or some other software-based alternative. Sorry Tivo, at those prices, you’ve lost a loyal convert. My eyes have been opened to the wonders of Tivo, but I’ve not gone blind to the cost.
I expect that this move will have the opposite effect Tivo is hoping for. They are undoubtedly looking to increase revenue, but my thought is that it’ll actually hurt their new sign-ups. Tivo has strugged financially since it’s inception and I fear this could be the final mistake they make if things are not quickly changed.
What do you think?